Assignment
Mason Medical
Balance Sheet
31-Dec-14 31-Dec-13
Cash $52,000 $60,000
Accounts Receivable 198,000 80,000
Marketable Securities 80,000 40,000
Inventories 440,000 360,000
Prepaids 3,000 7,000
Total Current Assets 773,000 547,000
Property, Plant, and Equipment, net857,000 853,000
Total Assets $1,630,000 $1,400,000
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Current Liabilities $240,000 $160,000
Bonds Payable 400,000 400,000
Common Equity 990,000 840,000
Total Liabilities & Equity $1,630,000 $1,400,000
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Income Statement 2014 2013
Sales $1,640,000 $1,574,000
Cost of Goods Sold 800,000 725,000
Gross Profit 840,000 849,000
SG&A 440,000 430,000
Interest Expense 40,000 25,000
Net Income $360,000 $394,000
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Key Ratios 2014 Industry Avg
Current Ratio 2.883
Acid Test (Quick Ratio) 0.973
Debt to Asset 0.447
Receivable Turnover 13.492
Inventory Turnover 2.630
Net Profit Margin 0.176
Asset Turnover 1.357
Return on Assets 18%
Return on Equity 22%
Complete the financial ratio exercises in the Ratio Analysis Spreadsheet.
Write a 750- to 1,050-word paper in which you summarize the financial performance of the organization. Explain how the ratios are calculated and how the results impact the organization. In addition, explain how the organization is performing compared to the industry averages. Provide rationale using data from the exercises.
Cite 3 peer-reviewed, scholarly, or similar references to support your paper.